Thread: Mexican remittances fall 3 percent in February

Mexican remittances fall 3 percent in February

By E. EDUARDO CASTILLO
Associated Press
Published: Wednesday, April 1, 2009 3:54 PM CDT

MEXICO CITY — The money Mexicans living abroad sent home fell three percent in February compared to the same month last year, the central bank’s president said Wednesday.

Even so, the drop was less than in January, when remittances were down 12 percent compared to January 2008, Guillermo Ortiz said during a news conference.

Remittances have been dropping for two reasons: the U.S. recession and a crackdown on illegal immigration that has stemmed migrant flows.

The bank reported Wednesday that Mexicans sent back $1.8 billion in February, compared to $1.5 billion in January.

Last year was the first time remittances — Mexico’s second largest foreign income source — have fallen year-to-year since the bank started tracking the money 13 years ago. Remittances slipped 3.6 percent to $25 billion in 2008 compared to $26 billion in 2007.

Also Wednesday, economists surveyed by the central bank issued a revised forecast that the economy will contract by 3.3 percent, down from the 1.9 percent decline projected last month.

The bank expects the Mexican economy to contract between 0.8 percent and 1.8 percent in 2009.

Economists believe the economy will contract the most during the first half of the year but will likely grow moderately in 2010.

Ortiz said the bank will tap in to its $30 billion fund from a currency swap with the U.S. Federal Reserve soon to inject liquidity in to the market.

Mexico has been auctioning off foreign reserves to support the peso, which has lost more than 30 percent of its value against the dollar since August as credit dried up and investors shed assets to cover losses at home. The peso was trading at 13.96 in afternoon trading Wednesday.

Ortiz told journalists Mexico will open a credit line with the International Monetary Fund of $47 billion to support its foreign reserves, although he said the bank will unlikely use the money, which would serve as a backup in case the crisis worsens.

www.lmtonline.com

Remittances slipped 3.6 percent to $25 billion in 2008

The U.S. is in a recession, yet more than 2 BILLION dollars each and every month is leaving this country and going to Mexico. That doesn't include the remittances sent to other countries, just Mexico.
Could this have ANYTHING to do with the recession?